The global economy is slowly moving toward recovery, yet markets
for everything from oil and gas to metal stampings and temporary
labor remain volatile and complex. To successfully navigate them,
companies need to move beyond tactical sourcing and implement a
strategic approach that enables them to identify opportunities for
savings and quickly drive them to the bottom line. To help them do
this, Ariba, Inc. (NASDAQ: ARBA), the leading provider of
collaborative business commerce solutions, today announced Ariba®
Category Management Services, a unique solution delivered in the
Ariba Commerce Cloud that provides the technology, capabilities and
community needed to effectively manage spend by category on an
end-to-end basis.
“Given today’s difficult economic climate, companies must not
only understand their spend, but the dynamics of global markets and
regulatory requirements that may impact their operations,” said
Patrick Furey, Director of Global Category Management, Ariba. “And
this means not just running sourcing projects, but instead,
developing a long-range global category plan that can drive more
holistic, sustainable supply chain management.”
To get such plans in place, Furey recommends the following:
- Know your Spend:In order
to rein in costs, organizations must have a clear view into where
they’re spending money, how suppliers are performing, and whether
procurement and sourcing processes are working. Through an analysis
of past spend, companies can make better-informed sourcing
decisions, rationalize supplier relationships for improved service,
reduce maverick spending and accelerate savings.
- Understand cost
structures:It’s impossible to manage costs without
understanding the factors that influence them. For indirect
services, this primarily means gaining a thorough understanding of
labor rates in various industries, geographies, and skill sets. For
direct materials, it involves understanding the relative
contribution of key factors such as labor and raw material costs to
the overall supplier pricing model, particularly for highly
volatile components which could have a considerable impact on
bottom-line cost.
- Factor in
globalization:There’s no denying that sourcing and procurement
are global activities. Demand for raw materials in China is
impacting the prices of everything from steel to resins. Natural
disasters that occur half way around the world can affect supply
chains close to home. And exchange rate fluctuations can turn a
profitable product line or service offering into a cash drain in a
matter of weeks. To effectively manage the impact of globalization
on spend and overall business strategies, companies must enlist
local category support staff across major supply regions to assist
with supplier qualification, market analysis, cost and logistics
management, and risk mitigation strategies; consider all risk
factors, and develop backup plans to cope with unexpected
downtimes.
- Manage demand and drive
compliance:Demand and compliance management are among the
fastest, most efficient ways to drive near-term savings. To
effectively manage demand, companies must understand who is placing
orders, what is triggering them, and how quickly they need to be
filled, as well as cost drivers, unit costs and volumes. To drive
compliance, they must enlist executive sponsorship, educate
employees on their roles in driving cost reduction, standardization
and quality improvement initiatives and track and manage progress
to control spending.
- Communicate and manage
change:People are by nature resistant to new ways of doing
things. To effect change, category managers must communicate their
sourcing and spend management strategies and enlist the
cross-functional support needed to drive them. This means:
- Getting key stakeholders
involved early
- Developing a detailed plan of
action and educating teams on their roles and responsibilities
- Clearly defining goals and
metrics and regularly monitoring progress
Executing effective category management plans requires more than
just technology. Delivered in the Ariba Commerce Cloud as part of
Ariba Managed Commerce Services, Ariba Category Management Services
provides companies with everything that’s needed to transform
sourcing into a strategic activity that delivers substantial
results, including:
- Market-leading applications to
manage spend from source to settle - all delivered as scalable,
cost-effective and burden-free cloud-based services
- Unparalleled market, category,
technical, strategic and other expert capabilities that can be
accessed on-site or remotely via the Web as needed to support
ever-changing business needs and objectives
- The Ariba Network, the world’s
largest Web-based trading community, empowering more than 300,000
global businesses to discover, connect, and collaborate for better
commerce
“With Ariba Category Management Services, companies can balance
their internal resources with external skills and capabilities that
can be scaled to accommodate their business needs as they evolve
and change,” Furey added. “These companies benefit from the
application of industry-leading technology and best practice
processes that allow them to see where they are spending their
money, find trading partners, negotiate optimal terms and prices,
manage supplier performance, place orders and better manage
commerce flow.”
And they can deliver fast and measurable results. On average,
companies that use Ariba Category Management Services drive savings
of more than 12 percent across a range of categories in the
following areas:
- Logistics
- Packaging
- Capital Goods
- Human Resources
- Construction and
Engineering
- MRO
- IT Hardware
- Facilities and Maintenance
- Marketing and
Communications
- Travel and Fleet
- IT Services
- Telecom
To learn more about the Ariba Category Management Services and
the benefits they can deliver for your organization, visit:
www.ariba.com/services
About Ariba, Inc.
Ariba, Inc. is the leading provider of collaborative business
commerce solutions. Ariba combines industry-leading software as a
service (SaaS) technology to optimize the complete commerce
lifecycle with the world's largest web-based community to discover,
connect and collaborate with a global network of trading partners
and expert capabilities to augment internal resources and skills,
delivering everything needed to control costs, minimize risk,
improve profits and enhance cash flow and operations – all in a
cloud-based environment. Whether you’re buying, selling or managing
cash, you can do it more efficiently and effectively in the Ariba®
Commerce Cloud. Over 300,000 companies, including more than 80
percent of the Fortune 500, use Ariba’s solutions to drive more
efficient inter-enterprise commerce. Why not join them? For more
information on Ariba commerce solutions and the results they
deliver, visit www.ariba.com
Copyright © 1996 – 2010 Ariba, Inc.
Ariba, the Ariba logo, AribaLIVE, SupplyWatch, Ariba.com,
Ariba.com Network and Ariba Spend Management. Find it. Get it. Keep
it. are registered trademarks of Ariba, Inc. Ariba Spend
Management, Ariba. This is Spend Management, Ariba Solutions
Delivery, Ariba Analysis, Ariba Buyer, Ariba Category Management,
Ariba Category Procurement, Ariba Contract Compliance, Ariba
Contracts, Ariba Contract Management, Ariba Contract Workbench,
Ariba Data Enrichment, Ariba eForms, Ariba Invoice, Ariba Payment,
Ariba Sourcing, Ariba Spend Visibility, Ariba Travel and Expense,
Ariba Procure-to-Pay, Ariba Workforce, Ariba Supplier Network,
Ariba Supplier Connectivity, Ariba Supplier Performance Management,
Ariba Content Procurement, Ariba PunchOut, Ariba QuickSource,
PO-Flip, Ariba Spend Management Knowledge Base, Ariba Ready, Ariba
Supply Lines, Ariba Supply Manager, Ariba LIVE, It’s Time for Spend
Management and Supplier Lifecycle Management are trademarks or
service marks of Ariba, Inc. All other brand or product names may
be trademarks or registered trademarks of their respective
companies or organizations in the United States and/or other
countries.
Ariba Safe Harbor
Safe Harbor Statement under the Private Securities Litigation
Reform Act 1995: Information and announcements in this release
involve Ariba's expectations, beliefs, hopes, plans, intentions or
strategies regarding the future and are forward-looking statements
that involve risks and uncertainties. All forward-looking
statements included in this release are based upon information
available to Ariba as of the date of the release, and we assume no
obligation to update any such forward-looking statements. These
statements are not guarantees of future performance and actual
results could differ materially from our current expectations.
Factors that could cause or contribute to Ariba's operating and
financial results to differ materially from current expectations
include, but are not limited to: the impact of the credit crises on
Ariba’s results of operations and financial condition; delays in
development or shipment of new versions of Ariba's products and
services; lack of market acceptance of Ariba's existing or future
products or services; inability to continue to develop competitive
new products and services on a timely basis; introduction of new
products or services by major competitors; the ability to attract
and retain qualified employees; difficulties in assimilating
acquired companies, long and unpredictable sales cycles and the
deferrals of anticipated orders; declining economic conditions,
including the impact of a recession; inability to control costs;
changes in the company's pricing or compensation policies;
significant fluctuations in our stock price; the outcome of and
costs associated with pending or potential future regulatory or
legal proceedings; the impact of our acquisitions, including the
disruption or loss of customer, business partner, supplier or
employee relationships; and the level of costs and expenses
incurred by Ariba as a result of such transactions. Factors and
risks associated with its business, including a number of the
factors and risks described above, are discussed in Ariba's Form
10-Q filed with the SEC on May 6, 2010.
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